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Uncertainty for the Biomass Industry Grows

It's not easy to turn around a big ship. When policymakers get it wrong, it can be a long hard slog to set things right. We're in the midst of just such a course correction on biomass energy policies, and there's some good news to report this week. Mounting demand for wood in Europe--which lacks adequate biomass sourcing standards and allows wood-burning to be counted as "carbon free" under EU climate policies--has led to an explosive growth in pellet mills across the Southern US that are exporting wood pellets to supply the European electricity market. But plans for one such mill in Pike County, Mississippi appear to be off, a sign that uncertainty for the future of the pellet industry is growing.

Pike BioEnergy, the company behind the mill, is owned by Drax Power. Drax is the UK's largest utility and a top purchaser of wood pellets sourced from the forests of the US South. These pellets are loaded onto cargo ships and shipped across the ocean to be burned in British power plants. Drax has also invested in vertically integrating its supply chain, building its own pellet mills in the region, such as the proposed mill in Pike County.

But a final option to buy land for the mill expired at the end of last year and the company did not renew it, meaning plans for the facility are effectively dead. According to local coverage of the deal, supervisors at the company indicated that changes in Britain's economy and political scene may have influenced the decision.

Earlier this month, the European Union Commission also announced an investigation into the state aid provided to Drax for the biomass conversion of one of its coal-fired power plants, adding to uncertainty for the company and the industry as a whole.

Biomass energy is dirty and destructive. Burning wood for electricity is highly inefficient. By substituting trees for coal, power plants avoid fossil-fuel carbon emissions. But trees are approximately half water by weight so to generate the same amount of electricity from trees as from fossil fuels, many more trees have to be burned, resulting in roughly 40% more carbon dioxide emissions at the smokestack per unit of energy generated. At the same time, if left alone, trees will continue to grow and sequester carbon.

Together, burning most types of forest biomass for electricity in even minimal quantities increases carbon emissions compared to coal and other fossil fuels for anywhere from 35 to 100 or more years, making climate change worse at a time when we need to be rapidly cutting our carbon pollution.

A small amount of biopower also requires a very large quantity of biomass and can drive enormous shifts in the landscape. Thus, even a limited number of conversions to biopower can have major impacts on the ground.

According to Forisk Consulting, LLC, the Pike County mill planned to use 1.1 million green tons of woody biomass per year, with 880,000 green tons coming from softwood pulpwood and the rest from mill residues. We estimate that sourcing this much biomass would impact 8,800 acres each year[1], larger than Epping Forest (6,000 acres), the largest area of ancient forest around London.

Biomass energy also takes our eye off the ball in terms of investing in the truly clean, 21st century renewable energy sources we need.

When European leaders mandated that 20% of Europe's energy should come from renewable sources and marshaled the support of their citizens to put public subsidies towards bolstering the transition away from burning coal, burning trees in the same dirty power plants was probably not what they and their constituents envisioned. You might assume they were thinking about energy from the sun, the wind, and geothermal, and lower overall energy needs from smart investments in energy efficiency.

What they got instead was a bill for millions of pounds in subsidies flowing to Drax to convert its coal-fired power stations to biomass. An analysis by the Daily Mail showed that in 2014, with two biomass units operational, Drax's subsidy was at least Â£340 million--about three-quarters of the company's gross profit! The figure was calculated from the plant's own public declarations of how much power it generated from biomass, and known details of how much the subsidies are worth per megawatt hour.

That's a bad deal for British taxpayers, Southern forests, and our climate.

European utilities are today's biggest drivers of expanded demand in the South for wood as a fuel source. But here in the US, we must get biomass policies right from the start so we don't repeat the same mistakes. That's why the Clean Power Plan, a new policy aimed at curbing pollution from power plants, America's biggest source of global warming emissions, must say no to the use of biomass sourced directly from forests.

Rising demand for wood-generated electricity--in the absence of adequate policies to protect our forests--risks irreversible damage to forest ecosystems, the species that depend on them, and a host of critical services they provide, such as soaking up carbon, flood control, and filtering drinking water for surrounding communities. But it looks like long-term support for biomass energy is becoming increasingly uncertain and that's good news on both sides of the Atlantic. Getting this policy signal right will help steer the industry away from high-carbon biomass fuels sourced from forests and ensure that climate targets are met overwhelmingly through energy efficiency and truly clean technologies, and that most public resources and private investments flow towards these technologies.

[1] We assume the Pike County mill would have drawn materials from forestry operations yielding approximately 50 tons per acre on average, predominantly made up of plantation thinnings (at year 15), but also including larger diameter materials from plantation clearcuts. Thus, even assuming that only 50% of Pike's overall annual feedstock would have come from concurrent forest residuals, the remaining 440,000 green tons of demand would impact 8,800 acres annually.